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An Assignment Submitted by Siddhi .D .

Pednekar (23-2008)
In

C04A3: Cost Management

Department Of Commerce Goa University 2009-20010

Problem No. 1
For the following transportation problem, find the initial basic feasible solution by northwest-corner rule method and least cost method. Warehouse 1 2 3 Available A 15 26 13 350 B 3 7 8 100 C 9 4 3 110 Need 60 150 350 Calculate total cost under both methods. Solution:
(a) Northwest-Corner Rule Method

Factory

No of allocations = m + n - 1 = 3+3-1 = 5 Therefore since m + n- 1 is equal to the number of allocations that is 5 the transportation problem is none degenerating. (m=no. of factories & n= no. of warehouses)

Basic Feasible Solution

Factory

A B C Need

1 15 3 9 60

Warehouse 2 3 Available 26 13 350 7 8 100 4 3 110 150 350 N= 560

Sr. No 1 2 3 4 5

Dealer 1 2 3 3 3

Factory/Warehouse Capacity Cost A 60 60 x 15 = 900 A 150 150 x 26 = 3900 A 140 140 x 13 = 1820 B 100 100 x 8 = 800 C 110 110 x 3 = 330 TOTAL 7750

a) Least Cost Method

Factory

A B C Need

1 15 3 9 60

Warehouse 2 3 Available 26 13 350 7 8 100 4 3 110 150 350 N = 560

ai = Availability bj = Need

ai > bj so the column 1 should be deleted.

Factory

A B C Need

Warehouse 2 3 Available 26 13 350 7 8 40 4 3 110 150 350 N = 500

bj > ai so the row C should be deleted.

Factory

A B Need

Warehouse 2 3 Available 26 13 350 7 8 40 150 240 N = 390

bj > ai so the row B should be deleted.

Factory

A Need

Warehouse 2 3 Available 26 13 350 110 240 N = 350

ai > bj so the column 3 should be deleted.

Factory

Warehouse 2 Available A 26 110 11 Need 0 N = 110 ai > bj so the column should be deleted.

No of allocations = m + n - 1 = 3+3-1 = 5 Therefore since m + n- 1 is equal to the number of allocations that is 5 the transportation problem is none degenerating. (m=no. of factories & n= no. of warehouses) Basic Feasible Solution Sr. No 1 2 3 4 5 Warehouse 1 3 3 3 2 Factory B C B A A Total Capacit y 60 110 40 200 26 Cost 60 x 3 = 180 110 x 3 = 330 40 x 7 = 280 240 x 13 = 3120 110 x 26 = 2860 6770

Problem 2: For the following transportation problem obtain a basic feasible solution under northwest corner method and least cost method and find whether the solution is degenerate. To A From I II III Need 5 9 27 150 B 3 4 20 250 C 22 17 5 450 Supply 150 300 400

Find total cost under both the methods. Solution: a) Northwest corner method To From A I II III Need 5 9 27 150 B 3 4 20 250 C 22 17 5 450 Supply 150 300 400 N=850

No of allocations = m + n - 1 = 3+3-1 = 5

Therefore since m + n- 1 is not equal to the number of allocations that is 4 the transportation problem is not none degenerating. Basic Feasible Solution Ser.no 1 2 3 4 To A B C C From I II II III Capacity 150 250 50 400 Coat 150 x 5 250 x 4 50 x 17 400 x 5 750 1000 850 2000

Total cost 4600 Therefore the total cost is Rs 4600

b) Least cost method To From A I II III Need 5 9 From 27 B 3 4 20 C 22 Supply 150

ai = Availability bj = Need Since bj > ai Row I gets deleted.

17 To 300 A 5 B 400 C Supply 300 400 N=700

17 150 II 250 9 450 4 N=850 III Need 27 150 20 100 5 450

Since ai > bj Column B gets deleted. A II III Need 9 27 150 C 17 5 450 Supply 200 400 N=600

Since bj > ai Row III gets deleted.

From

From

A II Need 9 150

C 17 50

Supply 200 N=200

Since ai > bj Column A gets deleted.

From

C II Need 17 50

Supply 50 N=50

No of allocations = m + n - 1 = 3+3-1 = 5 Therefore since m + n- 1 is equal to the number of allocations that is 5 the transportation problem is none degenerating. Basic Feasible Solution Ser.no 1 2 3 4 5 To B B C A C From I II III II II Capacity 150 100 400 150 50 Coat 150 x 3 100 x 4 400 x 5 150 x 9 50 x 17 450 400 2000 1350 850

Total cost 5050

Therefore the total cost is Rs 5050

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